nep-afr New Economics Papers
on Africa
Issue of 2017‒03‒12
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Private Banking and Crony Capitalism in Egypt By Ishac Diwan; Marc Schiffbauer
  2. Understanding intra-regional transport: Competition in road transportation between Malawi, Mozambique, South Africa, Zambia, and Zimbabwe By Thando Vilakazi; Anthea Paelo
  3. Liberation technology: mobile phones and political mobilisation in Africa By Marco Manacorda; Andrea Tesei
  4. Eradicating the Crime of Child Labour in Africa: The Roles of Income, Schooling, Fertility, and Foreign Direct Investment By Burhan, Nik Ahmad Sufian; Sidek, Abdul Halim; Ibrahim, Saifuzzaman
  5. Putting Paris into practice: Foreign aid, national ownership, and donor alignment in Mali and Ghana By Stephen Brown
  6. Macroeconomic Volatility and Economic Growth: Evidence from Selected African Countries. By Onyimadu, Chukwuemeka

  1. By: Ishac Diwan (Harvard University); Marc Schiffbauer
    Abstract: In Egypt, the bulk of bank loans during 2003-2010 went to politically connected firms. At the same time, the banking sector was liberalized increasingly operated around competitive and profit-maximizing principles. A key puzzle that the paper tries to answer is why private banks may lend in preferential ways to politically connected firms (PCFs) in such an environment. Using a rich corporate dataset, we find that politically connected firms did not have higher profitability compared to non-politically connected firms. This suggests that PCFs were perceived to have lower risk. Indeed, we find evidence that this was the case, and that lower risk reflected higher access to bailout guarantees (implicit or explicit), as happened in earlier periods, and/or higher perceived growth opportunities.
    Date: 2016–12–13
  2. By: Thando Vilakazi; Anthea Paelo
    Abstract: Efficient transport links are critical to enhancing the integration of markets in Southern Africa. This paper assesses the structure of markets, competition, and prices and costs of road transportation between urban hubs in Malawi, Mozambique, South Africa, Zambia, and Zimbabwe. Key findings are that certain routes, such as that between Lusaka and Johannesburg, have become more competitive over time and relative to benchmarks due to the availability of loads in each direction, improved efficiencies, and greater competitive rivalry between trucking firms from different countries. However, border delays and control of access to loads by large brokers continue to negatively affect competition and efficiency.
    Date: 2017
  3. By: Marco Manacorda; Andrea Tesei
    Abstract: Digital technologies have been widely used for political activism in recent years. In the first systematic test of their role as catalysts for political participation, Marco Manacorda and Andrea Tesei find that the growing use of mobile phones in Africa leads to more protests during recessions and periods of national crisis.
    Keywords: protests, politics, Africa, mobile phones
    JEL: D74 F50 O55 L96
    Date: 2017–03
  4. By: Burhan, Nik Ahmad Sufian; Sidek, Abdul Halim; Ibrahim, Saifuzzaman
    Abstract: African continent has the highest rate of child labour in the world. In this empirical study, we examined the impacts of income per capita, primary school enrolment, fertility rate, and the inward foreign direct investment (FDI) stock on the rate of child labour in Africa. We used the panel data on child labour that comprises of 44 African countries for the period 1980–2003 to assemble the largest number of observation on the variables employed. By employing the Panel Estimated Generalized Least Squares (EGLS) with cross-section weights method, the results of regression analysis showed that the raising of income per capita, FDI, and the percentage of school enrolment were highly significant in reducing the rate of child labour in Africa. Furthermore, a decrease in fertility rate was highly significant to curb the incidence of children employment in the labour market. The weighted-R2 of the panel regression was reported at 95.1%. Following the results, the role of government in implementing public policies was discussed.
    Keywords: child labour; Africa; income; schooling; fertility; globalization; foreign direct investment
    JEL: I30 J13 O55
    Date: 2016–11–16
  5. By: Stephen Brown
    Abstract: This paper examines the application of the first two principles of the 2005 Paris Declaration on Aid Effectiveness, namely ownership and alignment, to the cases of Mali and Ghana. It argues that Western donors and recipient governments have adopted the Paris Principles mainly in form, rather than in substance, not because of a lack of capacity but rather due primarily to a lack of will, related to interests and incentives on both sides to maintain the pre-Paris status quo. As a result, the impact on Mali’s and Ghana’s relationships with their traditional donors has been minimal and short-lasting. To the extent that donors and recipients have not significantly changed their practices in either Mali (a poor, fragile, aid-dependent country with low state capacity) or Ghana (a wealthier and more stable country with greater capacity), it seems unlikely that they will be able to apply the Paris Principles elsewhere. Together, the cases of Mali and Ghana, placed in a broader context, suggest that the Paris Agenda is dying.
    Keywords: aid effectiveness, Paris Declaration, ownership, harmonization, Mali, Ghana
    Date: 2016
  6. By: Onyimadu, Chukwuemeka
    Abstract: This paper investigates the relationship between macroeconomic volatility and long run economic growth in a panel of 40 African countries over the period 1980 – 2014. The paper re – examines the postulates of both Ramey and Ramey (1995) – where investment was the primary link between volatility and growth - and Aghion et al (2005) – where financial credit constraints was the primary link - , that there is a negative and significant correlation between macroeconomic volatility and long run economic growth. The findings in the paper refutes this negative relationship between volatility and economic growth, with the conclusion that there exist a significant and positive correlation between volatility and economic growth with reference to the sample data set used. The findings of this paper are robust to controls for investment, different and appropriate measures of financial development, level of openness, government size and each countries initial level of real per capita GDP.
    Keywords: Macroeconomic Volatility, Economic Growth, Financial Development, Investment
    JEL: E6 G1
    Date: 2016

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